• Justice Ranjana Prakash Desai to head the 8th Central Pay Commission.
• Commission to submit recommendations in 18 months, effective from Jan 2026.
• Nearly 12 million government employees and pensioners to benefit.

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the formation of the 8th Central Pay Commission (CPC) and appointed Justice Ranjana Prakash Desai, former Supreme Court judge and current chairperson of the Press Council of India, as its head.

The Commission will submit its recommendations within 18 months, likely to take effect from January 1, 2026. Unlike earlier commissions, the 8th CPC will have one part-time member, Pulak Ghosh, professor at IIM Bangalore, and Pankaj Jain, Petroleum and Natural Gas Secretary, as member secretary.

The CPC will review pay structures, retirement benefits, and service conditions of nearly 5 million Central government employees, including defence personnel, and around 6.9 million pensioners. The recommendations are expected to be implemented retrospectively, continuing the decade-long cycle of pay revisions seen with earlier CPCs.

While drafting its report, the 8th CPC will consider economic conditions, fiscal prudence, developmental priorities, and the financial impact on both central and state governments. A new addition to its terms of reference (ToR) is the assessment of the unfunded cost of non-contributory pension schemes.

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The 7th CPC, constituted in 2014 and implemented in 2016, led to a Rs1 trillion increase in expenditure for the Centre. The current ToR, finalised after consultations with ministries and staff representatives, omits specific issues proposed by employee unions, such as restoring the old pension scheme and enhancing education allowances.